Embracing AI in manufacturing presents a massive opportunity that the UK must not pass up

24 September 2018

 

When it comes to the adoption of new technologies, the UK findings from PwC’s Global Digital Operations Study 2018 paint a mixed picture, to say the least.

On the positive front, the top three technologies that UK manufacturers say they’ve adopted are predictive maintenance (already implemented by 53% of respondents), manufacturing execution systems (47%), and connectivity/the industrial internet of things (37%). All of these percentages compare favourably to the global averages.

But turn to the figures on AI adoption, and it’s a different story. Only 1% of UK manufacturers tell us they’ve implemented AI – well behind EMEA’s 5%, and left trailing by Asia’s 15%.

True, there are some mitigating factors. One is that differing perceptions of what “AI” means in different regions may have influenced people’s responses. Another is that if you include respondents who say they’re piloting or planning to use AI, the UK figure rises to 24% – not too far off the global average of 29%.

But the fact remains that there’s an AI adoption gap between UK manufacturers and our overseas competitors. Asked to explain the slow progress, UK respondents point to obstacles like uncertain return on investment (51%); a lack of maturity around technologies (46%); concerns over the reliability of data (40%); a lack of necessary skills in the workforce (36%); and a lack of transparency and trust (31%).

But with those barriers impeding progress, does the UK’s tardiness in embracing AI actually matter? The answer is a resounding yes. A recent PwC analysis found that widespread adoption of AI would have a transformational effect on UK productivity and growth – adding some 10.3% to GDP by 2030, with significant gains across all UK regions.

The size of this boost makes it vital that the UK seizes the AI opportunity. And it’s an imperative that the UK government is fully aware of: witness its launch in April 2018 of the ‘AI Sector Deal’, reinforcing AI’s position at the heart of its Industrial Strategy as a source of growth, productivity and innovation.

So while the UK Government is starting to match words with deeds in support of AI adoption, where should the nation’s manufacturers focus their AI investments to maximise the benefits given the concerns they’ve voiced over uncertain return on investment?

Again, PwC research provides useful guidance. Our global study of the economic impacts of AI pinpoints three big areas of opportunity in manufacturing: enhanced monitoring and auto-correction of manufacturing processes; supply chain and production optimisation; and on-demand production.

In terms of timing, the area that’s ‘ready to go’ now is greater automation of many production processes. In the medium term – three to seven years – we’ll see intelligent automation in areas ranging from supply chain optimisation to predictive scheduling. Beyond that, the focus will extend to using prescriptive analytics in product design – solving problems and shaping outcomes rather than simply reacting to demand.

That’s our roadmap for AI in manufacturing. But to follow it successfully, UK manufacturers will need to overcome the concerns they highlighted in our study – not least over AI skills in the workforce, and transparency and trust in AI systems. Growing and embedding the right skills will clearly require smart planning and investment. And the solution to the trust deficit lies in applying the principle of “responsible AI”, building and using AI capabilities in a transparent and ethical way where their reasoning is clear to human co-workers.

UK manufacturers that put all this in place will be well-placed to generate major benefits for themselves and the economy. But they’ll also need something else: far-sighted leadership with a clear and visible commitment to AI. Here too our research raises concerns, with only 16% of UK manufacturers – against a global average of 34% – agreeing that their leadership has a clear vision for the digital future, and acts as a role model. Unless the UK’s manufacturing leaders set out and pursue a bold vision for AI, then we’ll continue to lag, both as individual businesses and an economy.

The message is clear. Widespread adoption of AI in UK manufacturing will have a transformational impact. The Government is prioritising it, and manufacturers are increasingly alive to AI’s potential. However, good intentions alone won’t deliver the goods. The UK has the skills and industrial base to make the most of the AI opportunity. But if we’re to keep pace with the rest of the world, the really hard work is only just beginning.  

 

Rob McCargow

Rob McCargow | Director of Artificial Intelligence
Profile | Email | +44 (0) 7841 567264

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